People Are Starting to Control The Media

By Müge Mengü – New YorkIt’s obvious that we’re in the digital era. Technology is under our control, and we can choose the kind of media to come in contact with, as well as how and when to come in contact with it. Studies show that day by day, consumers are going to war against media ads.

According to the studies done by Yankelovich Research Company, 65% of Americans are fed up with marketing messages and 69% think ads should be completely wiped out. 87 million people in the USA have signed up to stop receiving telemarketing calls, and 42% of internet users block marketing pop-ups.

William J. Grimes worked with companies like ESPN, Multimedia Inc, and Zenith Media as CEO.(By Muge Mengu)

Consumers seem eager to get the media under their control. Google lets people download video files; 16 million Americans download music via the internet to their I-Pods. For TV, the future seems to belong to TiVo, which allows people to watch what they want to, when they want to. Almost 90% of TiVo users do not watch commercials. If things continnue this way, by 2007, 60% of TV users will be zapping all commercials. This means that 6.6 billion dollars worth of marketing will be tossed into the trash. Since most people are spending more time on-line, the first solution, which 73% of big firms have come up with, is marketing on the internet.

We shared our thoughts on media with an expert who has dedicated himself to the American media, William J. Grimes. After becoming Vice President at CBS and working with companies like ESPN, Multimedia Inc, and Zenith Media as CEO, Grimes is now a media investment consultant. We talked about the extent of the unavoidable process that the media is in with New School Univeristy Media Management Department Chair J. William Grimes.

Can you evaluate the latest trends in media? Is the traditional media losing its battle with the new media?I think the biggest trend is because of bigger distribution, satellite, Internet, more people are getting a greater choice of content. There is more content and there are more ways to distribute the content. So the audience is getting smaller for traditional media. The result of that will be, I think, more new content producers, information and entertainment products distributed to smaller groups of people. So the winners will be smaller new companies. And losers, when I say losers, they are not going to out of business, the New York Times will not go away, but they will have increasingly reduced readership because the readers will have much greater choice of content.

Rupert Murdoch made a speech and he commented about the newspaper reporters and editors adapting to the digital age. Will the nature of this profession change? The New York Times company formed a committee to look at New York Times paper and website, to understand what they were doing wrong. This committee came out with a number of things the Times was not doing well. One of these is if you write a letter to the Times, you hardly ever get a response back. They decided that they had to find a way to communicate with the readers. They decided to use fewer unnamed sources, because the readers don't like unnamed sources. I think we are going to see changes in traditional media. The magazines and newspapers will be more responsive to the readers because the readers can go to the Internet now and interact with bloggers. Blog are having an increasingly large impact on readership. People who read blogs frequently do not read traditional newspapers or magazines.

How are the advertisers affected? This year advertisers in the US have spent 5 percent of their budgets on Internet advertising. That means 10 billion dollars of the 200 billion USD marketing budget. That’s up from 2 percent 3 years ago. So it is growing very rapidly. The traditional media, particularly broadcast TV and TV networks, and magazine companies, are losing their advertisers to websites, Google and Yahoo and AOL. AOL looks like an old company now.

New School Univeristy Media Management Department Chair J. William Grimes.

Does audience measurement make a big difference?Audience measurement, particularly of TV and radio, has been unreliable. There is not enough data not enough people are questioned. Nielsen measures only about 10 thousand US homes, but there are a hundred million US homes. The new technology will enable media companies and advertisers to have a better, more accurate measurement of how many people are reading the ads.

It will mean if a media company or a magazine or a TV doesn’t deliver the audiences interested in the advertisement companies’ product, then the advertising company won’t be buying more TV ads. We heard the other day General Motors is cancelling a lot of TV advertising. They are buying advertising on Yahoo, Google or other internet companies. That’s because I think they have an idea that the internet companies are working better for them.

Is Video-on-demand a radical change?Video-on-demand means people in their homes or with their cellphones wherever they are will be able to call up any particular program. The cable companies have built broadband delivery of lots and lots of data into households in America and around the world. So the person in his or her home will soon be able to use his cellphone or PDA to say, “I want to watch such and such movie, I want to watch the Sopranos, I wanna watch the football game from 1990.”

All this programming will be stored at the cable company and accessed by the individual, but there will be a charge for that. This will grow the business, but it will change the way the people watch TV. TiVo has already started this with time-shifting, delaying programs, and eliminating commercials. Video-on-demand will have a big impact on advertisers and media companies. This is better for the consumers because they get more choice. They will get more programming when they want. The winner is the consumer.

TV and media will change more in the next 5 years than it has changed in the last 50 years. Do you agree?I would say it exhausts me to think about that much change. I assume the ability to send a lot of data in video, audio or text formats to people wherever they are, at home, on vacation, in their cars will continue. The ability to access data when they want will put people in charge. The advertisers are going to find different ways of investing their money.

Who are going to be the media producers in this case?I think more and more people. Opportunites will open up. To make TV financially successful, a network has to reach millions of people. But now the audiences are getting smaller, the cost of video production is coming down. I think more and more people and small companies will produce programs. The big companies will lose some of their dominance. The dominance of TV companies, movie companies, is eroding, just like the dominence of the NY Times in the print medium is diminishing. Big companies will lose their audience to small companies which will produce programs about, for instance, “eye glasses.”

CBS or Time Warner would not produce such a program because the audience for it would not be big enough for them. There are going to be exciting opportunities for more people. The producer of the program of the eye glasses does not have to go to the media company, he can directly go to the advertiser. He can say, “Do you want to sponsor this, we can sell it on the internet.” The networks are going to lose their control over the advertiser producer relationship.

GRIMES’ MEDIA OBSERVATIONS- Viewers have stopped following traditional media sources like television and newspapers.- Various big and small firms with diverse programs in media are going to spring up.- In the long term the winners are going to be small firms and the losers are going to be traditional media companies.- Traditional media companies are going to publish and acquire more advanced websites.- Magazines and newspapers are going to increase their focus on their readers.- New technologies are going to allow media companies and advertisers to measure the number of ads viewed with more accuracy and efficiency.- The way people watch TV is going to change. The kind of TVs that allows them to watch what they want and when they want is going to increase.- Media companies are going to lose their power over advertisers and networks